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    Technology

    The Energy Podcast

    The Energy Podcast from Shell is the home of conversation about the energy that powers our world.

    With demand for energy growing as society moves to net zero, how will the world balance providing secure and affordable energy with accelerating the transition to low-carbon solutions?

    With more than a century of experience connecting energy to people, we bring together our own experts and guests to explore the big topics in energy – from the role of liquefied natural gas to the impact of AI; from the future of transportation to carbon capture and storage.

    Join us on The Energy Podcast, for unique insights into an energy system that enables everything we do.

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    Copyright: © 2020 Shell

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    Latest Episodes:
    Engineering one of the world’s most advanced energy projects Aug 01, 2025
    Show notes

    In this bonus episode of The Energy Podcast, host Bryony speaks with Hadi Quazi, Shell’s Joint Venture Asset Manager for LNG Canada. Together, they explore how Shell and its partners brought to life the largest private-sector investment in Canadian history – and put a remote corner of Canada on the global energy map. From a 670-kilometre pipeline crossing mountain ranges to a liquefaction facility on the country’s west coast, this episode takes you inside the engineering and partnerships helping to meet the world's growing demand for liquefied natural gas (LNG).

    Read more about LNG Canada

    Explore the engineering behind LNG Canada

    Learn more about The Energy Podcast

    Cautionary note

    The Energy Podcast is a Starstruck Media production for Shell.

    See omnystudio.com/listener for privacy information.


    LNG: the world’s secure, flexible, affordable, lower-carbon fuel? Jul 08, 2025
    Show notes

    Demand for liquefied natural gas – or LNG – continues to grow due to its potential to deliver flexible energy around the world. It has its critics, but LNG plays an important role in the energy transition by helping to displace coal and supporting renewable power generation. In this episode, hosts Bryony and Eddie hear from Shell's President of Integrated Gas, Cederic Cremers, on why global demand for LNG is expected to grow, the importance of addressing methane emissions, and Shell's LNG ambitions.

    Read more about liquefied natural gas

    Learn more about The Energy Podcast

    Cautionary note

    The Energy Podcast is a Starstruck Media production for Shell.

    See omnystudio.com/listener for privacy information.


    What could the future of energy look like? Explore the forward-facing world of scenarios Jun 24, 2025
    Show notes

    To make better decisions today, we need to challenge our assumptions about the future. For half a century, that’s what Shell’s scenarios have done. In this bonus episode, explore how and why scenarios are developed – and the three distinct visions of the future presented by Shell’s latest report. Host Eddie is joined by Peter Wood, Shell’s Chief Energy Adviser, and Dr. Mallika Ishwaran, its Chief Economist.

    Learn more about The Energy Podcast

    Explore the 2025 Energy Security Scenarios

    Cautionary note

    The Energy Podcast is a Starstruck Media production for Shell.

    See omnystudio.com/listener for privacy information.

    See omnystudio.com/listener for privacy information.


    Energy transition explained Jun 10, 2025
    Show notes

    Where are we in the global transition from fossil fuels to low-carbon energy? In the first episode of a new season, hosts Bryony and Eddie are joined by Peter Wood, Shell’s Chief Energy Advisor, for a lively conversation taking stock of the world’s energy system today. How is it evolving – and where? What’s driving the pace of progress – and holding it back? And what’s Shell’s role in all of that?

    Listen for unique insights into an energy system that enables everything we do.

    Learn more about The Energy Podcast

    Cautionary note

    The Energy Podcast is a Starstruck Media production for Shell.

    See omnystudio.com/listener for privacy information.

    See omnystudio.com/listener for privacy information.


    Coming soon: a new season of The Energy Podcast Jun 03, 2025
    Show notes

    The Energy Podcast from Shell is the home of conversation about the energy that powers our world. In this new season, we bring together our own experts and guests on the big topics in energy, from liquefied natural gas (LNG), to artificial intelligence (AI), to carbon capture and storage (CCS).

    New episodes drop every two weeks starting June 10, 2025, and this season you can also watch each episode on YouTube.

    Learn more about The Energy Podcast

    The Energy Podcast is a Starstruck Media production for Shell.

    Cautionary note

    See omnystudio.com/listener for privacy information.

    See omnystudio.com/listener for privacy information.


    Can AI get the world to net zero faster? Apr 17, 2024
    Show notes

    Rapid advances in artificial intelligence (AI) are helping the energy industry accelerate the transition to a low-carbon future. The Energy Podcast explores how AI is being used today and discusses how to unleash its potential. Presented by Eno Alfred-Adeogun. Featuring Kate Kallot, founder and CEO of Amini, Bob Flint, CEO of Mirico and Amy Challen, Shell’s global head of AI. Additional reporting by Claire François and Berry Mulder. The Energy Podcast is a Fresh Air Production for Shell, produced by Annie Day and Sarah Moore and edited by Eno Alfred-Adeogun. 00:00:00 Eno Alfred-Adeogun: Today on The Energy Podcast. 00:00:07 Audio: I will be working alongside humans to provide assistance and support and will not be replacing any existing jobs. You sure about that, Grace? Yes, I am sure. 00:00:20 Eno Alfred-Adeogun: That’s Nurse Grace speaking at the world's first robot press conference last year. And yes, she’s a robot. Powered by artificial intelligence this humanoid can diagnose illness, deliver treatments, and even offer patients emotional support. Impressive, right? Well, yes, but she’s just one of many examples of AI-enabled machines designed to address some of the world's biggest challenges; social care, disease, hunger, and probably sooner than you think. Consider how deeply AI is already entwined in so much of our daily lives. From work commutes … 00:01:03 Audio: You’ve arrived at your destination. 00:01:04 Eno Alfred-Adeogun: ... to virtual learning … 00:01:07 Audio: (foreign language). 00:01:07 Eno Alfred-Adeogun: ... to, " Alexa, what’s on my to- do list?" 00:01:11 Audio: Subscribe to The Energy Podcast. 00:01:14 Eno Alfred-Adeogun: A global AI revolution isn’t coming, it’s already here. So, could this rapidly advancing technology also tackle the pressing challenge of lowering emissions? Hello, I’m Eno Alfred-Adeogun, and today on The Energy Podcast we ask, can AI get the world to net- zero faster? Joining me to discuss this is Kate Kallot, founder and CEO of the African tech startup Amini. Bob Flint, CEO of methane emission monitoring company Mirico. And Shell's global head of artificial intelligence, Amy Challen. It’s really great to have you all on the episode today. Now, before we delve into the world of AI, a really helpful place to begin is defining what it actually is. Because by the number of definitions I found when researching this episode, that's actually harder to do than it sounds. So let’s briefly see if we can reach a consensus of what it actually is. Kate, coming to you first. 00:02:20 Kate Kallot: For me, I have one simple definition of AI, which is going to literally take one sentence. It is the science to make computers think and take actions like humans. 00:02:30 Eno Alfred-Adeogun: Love it. Brilliant. Brilliant. Amy, what about you? Can you add to that? 00:02:34 Amy Challen: I think I’m going to give a more boring answer. I often think about it compared to software. In software, we write the rules. We say, " If this happens, then that happens," and we define what that rule is. But AI works differently. We give AI a load of historical data, and we say, " You tell us what happens based on the patterns you've observed in the past." And so it can be a bit of surprise what it comes up with. The other thing to watch out for is that if our historical data is biased, if the world has changed, then we're going to see that in the model. So we have to be quite careful. 00:03:10 Eno Alfred-Adeogun: Okay. Bob, no pressure. We’ve got two great answers. Do you have anything to add onto the definition? 00:03:16 Bob Flint: Yeah, I get to go last. I think all of the above, plus extending into areas where humans aren't necessarily good, which is looking at huge volumes of data. So being able to process all the bits and bytes that come from sensors from the real world and floods of information like you would find in an oil and gas company and process that in super high speed. 00:03:40 Eno Alfred-Adeogun: Okay, so now that’s clear, we can turn our attention to how the energy sector is actually harnessing the power of AI. So, Bob, your company, Mirico, it monitors emissions, and then companies can pair the data that you gather with AI, which can then help to combat the emissions found. Can you share some good examples of this pairing in action? 00:04:06 Bob Flint: What we do is primarily we address the issue of methane emissions from energy. And methane is about 30 times worse than carbon dioxide for global warming, so it’s something that we all should be concerned about. The good news is if you stop emitting methane, the world starts to cool pretty much immediately because methane just decomposes in the atmosphere. So that’s why it’s so important. So we scan an area, say, an oil and gas facility, for those emissions. Measurement leads to action, leads to reduction, and we can then put that data into one of Shell's systems of record, say a digital twin. 00:04:48 Eno Alfred-Adeogun: On the digital twin, because that's another concept I feel like I've read a lot about as well. Could you just expand on what that is? 00:04:54 Bob Flint: A digital twin would be a replica of something in the real world, a refinery, a rig and it sits in silico, in a computer rather than in the physical world. So that would enable you to, for example, start making predictions or what-if type of questions on what might happen in the real world in circumstances which you wouldn't want to see. So you might predict what happens if I change temperatures and pressures in a way that might be dangerous. Well, I can do that in a computer. I wouldn’t want to do that in the real world. 00:05:30 Eno Alfred-Adeogun: Now, considering the ambitious climate targets that have been set worldwide, it's really no wonder that people are looking to AI for solutions. Amy, what would you say are the main ways that AI is enabling a low-carbon energy system? 00:05:47 Amy Challen: I think there are four main ways it’s already doing this and is going to continue in the future. Firstly, it can improve the efficiency of everything we're already doing. Whether that’s renewables or hydrocarbons, a couple of percentage points of efficiency can make a difference to the productivity of our energy system and can reduce CO2 emissions and methane emissions. The second one is I don't think we're going to enable a widespread renewable system without having really excellent forecasting and optimisation, two things that AI is incredibly good at. Because renewables like wind and solar, they're intermittent. Sometimes the wind blows, sometimes the sun shines, sometimes it doesn't, and it's not entirely predictable. So, you use AI to predict when that will happen and to optimise how you use your battery, how you buy and sell energy to make sure that we always have the energy supply when we need it. The third way is through everything we can do in lab sciences, in research and development there, and in design of a new energy components and systems. So for example, with the lab sciences, you have a whole process of research you go through. You look at papers and patents to have an idea of what to research on. AI can really speed up your search there and find the right things to be looking at to make suggestions. And finally, it’s got a big role to play in monitoring. If we don’t know what the current situation is in terms of working out where methane emissions is, then we don't have a baseline, and we can't track. And that’s hugely important to be able to know what's effective, what's not, and where are we going. 00:07:25 Eno Alfred-Adeogun: Kate, you’re based in Africa, so it'd be really, really good if you could paint a picture of the role AI is playing on the continent, if at all, in different energy systems. 00:07:37 Kate Kallot: Africa is still the most data- scarce continent. We think about the data scarcity affecting many different places, whether it's having billions of people that are still unconnected, whether it's having data scarcity when it comes to satellite imagery, when it comes to meteorological data. So when we think about the transformative role of AI in Africa a little bit more broadly, there's still step one that needs to be fixed, which is the data scarcity. Now, when it comes to where AI can be applied, it's important to remind everyone that AI is just a tool, and it's not going to come and transform everything and make everything better – it’s a means to an end. It’s not actually the end. So when we think about the solutions that AI will enable to build, we always have to go back to the foundation, which is what problem we're trying to solve. 00:08:28 Amy Challen: And could I build on something Kate just said as well, which is there's no AI without data, absolutely foundational. But also, AI and data, they're not the answer to the energy transition. They’re both mega-enablers of it, but fundamentally, you have to have the physical and chemical technologies and a huge change in the way we work and the way we live in order to make that happen. 00:08:50 Eno Alfred-Adeogun: There’s an old adage, but don't ask me to quote where this came from. But I bet you might have heard of this, that you can't manage what you can't measure. So, with that in mind, Bob, how important is it to not only track greenhouse gas emissions, but to do so accurately? 00:09:11 Bob Flint: As you say, you stand no chance of understanding what to do if you don't know what the baseline is. And actually, maybe people think emissions often come from leaks, a flange that isn't quite tightened properly. In many cases, emissions like methane just come from the way that an asset is being managed. And actually, you can start to manage the asset in a different way if you know why emissions are happening. You can start to maybe change the way in which it's loaded and unloaded or even cleaned. And then the last piece where AI could really help in emissions is helping to optimise. So in that digital world, if you have got a digital twin and you're able to run some sophisticated algorithms, you can start to say, " Well, I'm not going to tolerate last year's emissions. This year, I’m going to make less. And I’m going to set myself a target, and I'm going to meet or exceed that target. 00:10:04 Eno Alfred-Adeogun: Now, with the speed at which technology is advancing, the potential solutions that will arise through AI are vast. And when it comes to the energy sector, we're already seeing that potential turned into reality. Take for instance the drone parked in a box at Shell's Energy and Chemicals Park Rotterdam in the Netherlands, where crude oil is processed. Claire François is with Shell’s robotics expert, Berry Mulder, to find out how the drone uses AI to monitor the site and detect leaks. 00:10:36 Berry Mulder: So, there’s actually no one on site to fly the drones. They’re sitting remotely, and the drones go around a few times a week to scan for emissions, to check on rooftops, and all the other things that operators typically go around for. 00:10:53 Claire François: Well, we’ve just seen the drone fly off. Can you tell us what it's doing now? 00:10:56 Berry Mulder: Looking at the tanks from above, so basically saving us many hours a day to, well, not walk up to the tanks every time. It just brings us the pictures. So, the people, the operations, they look at the pictures as if they would walk around and then interpret what needs to be done to the top of the tanks. 00:11:13 Claire François: And so how is AI part of this process? 00:11:17 Berry Mulder: Right now, people are still looking at the pictures because it's a learning process for all of it. We expect that AI machine vision analytics will help us to analyse our pictures faster and better in the near term, but just spotting the differences, the anomalies, corrosion or things that broke or emissions leaks similar to what we do with the ground robots right now. 00:11:38 Claire François: Can you tell us how a drone like this and your other robots in the field are helping to detect methane emissions or broader emissions? 00:11:46 Berry Mulder: So really having additional sensors on the ground and in the sky to detect leaks while they're still small, and so we can fix them while they're still small and not big. And that’s where having additional noses fly and drive around really helps us if you take it to the AI part. It’s also eventually sort of making correlations. Where are the sources coming from? Where is it building up faster? We expect it will even help us in emergency responses, try to detect the plumes, the concentrations faster than we do today. 00:12:23 Eno Alfred-Adeogun: As Berry just demonstrated, technical solutions to help reduce emissions already exist. But despite that, according to the United Nations, the world is falling short of its climate goals. How can AI be a better companion to existing digital technologies, Bob, to drive progress more quickly? 00:12:44 Bob Flint: Most operating companies would have vast data sets already. AI can play a role in just mining that data for information and then surfacing that so that it can be acted upon. The other thing I just want to point out is that the emissions challenge, and we heard something of that drone solution in that clip, is really about deploying lots of different solutions. There’s no single silver bullet in that measurement journey. So, you’ll probably have some satellite systems, some drone systems, some ground sensors, maybe even some robots. And bringing all those diverse data sets together is a big challenge, and AI can really help us do that. So, build one picture of what's happening in the real world from a set of very disparate data sets and then using that to drive decision- making. That will be a wonderful application. 00:13:43 Amy Challen: And that’s essentially what a digital twin is at the end of the day. It’s a combination of all these different data sources. So, like you say, Bob, your laser- based detection of methane using machine vision techniques to do that, and then all the other collection of data about, say, the operation of an asset, and you pull that together. And as Berry in the extract just said, you're going from quick detection of leaks, which you can shut down as quickly as possible, to prediction of leaks. So, you’re much less likely to happen because you can fix things in advance, you can work out where there's risk, and you can do preventative maintenance, so it doesn't have to happen. And that’s the aim at the end of the day, is how you can act in advance to reduce emissions rather than just react quickly. 00:14:23 Eno Alfred-Adeogun: Now, we haven't touched on an important group I think that we need to consider in this conversation, and that's energy customers, both businesses and the public. What benefits could AI offer that will encourage them to reduce their own emissions? Bob can I ask you that? 00:14:41 Bob Flint: Yeah, I think whether it's consumers or businesses, actually, energy is unfortunately a topic that's quite hard to get people to engage with. And one of the methods of doing that is price. We all feel energy is something that is visible when we get the bill. But in order to be energy efficient, maybe change our behaviours takes quite a lot of effort, and I think AI can really help us with taking away some of that friction by giving us maybe some price signals, “Here's a discount if you do something." Like maybe in the US, there are demand reduction programs, which are run by businesses for businesses, encouraging people to switch off their refrigerators and air conditioning systems for an…

    Full show notes at the publisher

    How Can Economies Thrive While The World Cuts Carbon? Jan 18, 2024
    Show notes

    As countries across the world strive to reach their climate targets, they must make sure that the move to a cleaner energy system supports economic growth. The Energy Podcast explores this difficult balancing act. Presented by Julia Streets. Featuring Dr Rob Charnock of the Metis Institute for Climate Strategy, climate scientist and advisor Dr Yvonne Maingey-Muriuki and Shell’s chief economist Dr Mallika Ishwaran. The Energy Podcast is a Fresh Air Production for Shell, produced by Annie Day and Sarah Moore, and edited by Eno Alfred-Adeogun. Episode Transcription: 00:00:00 Julia Streets: Today on The Energy Podcast. 00:00:07 Speaker 2: Economic growth and developmental sustainability are not mutually exclusive. 00:00:13 Speaker 3: With a strong talent pool of young entrepreneurs and qualified engineers, we are pressing forward with solutions in climate-smart agriculture, water conservation, clean energy innovations, and more. 00:00:29 Speaker 4: Let us come together to build resilient, sustainable and green businesses, communities, and countries of the future. 00:00:39 Julia Streets: The dust has settled on COP28, and the main takeaway was clear; the world is falling short of its climate targets. But as the leaders who gathered at the conference highlighted, there remains an appetite to do better while simultaneously ensuring economies keep turning. The question is, how? The climate summit showcased diverse approaches. Some nations prioritised boosting the supply of lower carbon energy to meet demand and remain competitive. Others advocated for increasing funding in renewables to attract investment and spur the creation of more jobs. And while some countries pushed for a complete phase-out of all fossil fuels, others favoured a phase-down, where coal, oil, and gas usage is reduced rather than eliminated as a more economically viable plan. The reality is, different solutions will be needed in different places, and countries will move at different paces to achieve net- zero. Hello, I'm Julia Streets, and today on the Energy Podcast as we look ahead to 2024, we ask: how can economies thrive while the world cuts carbon? Joining me today are guests, Dr Yvonne Maingey-Muriuki, who is a climate scientist and strategic practitioner to organisations operating in Africa. Dr Rob Charnock who is director of the Metis Institute for Climate Strategy, and Shell's chief economist, Dr Mallika Ishwaran. Now, before we look ahead to what this year and beyond may have in store, let's take a moment to reflect on where things currently stand. Rob, I'm going to come to you. How would you rate the current global progress in cutting carbon? 00:02:27 Dr Rob Charnock: I think what was incredibly interesting to see at the recent COP, was that it's the first global stocktake, so we really get a sense of how close we are to being on track towards the targets set out in the Paris Agreement. And what I thought was very encouraging is, previously we thought we were on track for somewhere between 2. 7 to 3.6 degrees of warming, but as we get more and more commitments coming through that are updated as well after a few years, we see that we're getting closer. Now, that's not to say we're on track for 1. 5 or even well below two degrees at the moment. 00:02:58 Julia Streets: Some areas of the economy are more challenging to decarbonise than others. I mean, I think particularly industry and transport as well, but they are central to economic growth. I'm curious to think about what's the way forward, and Mallika, I'd love to come to you for your thoughts on that. 00:03:16 Dr Mallika Ishwaran: So what we are seeing is there's a sector by sector difference in how the different sectors are progressing in the transition. I think you can see the evidence is there that power is decarbonising, renewables are coming in at scale and really are changing and disrupting the system. But there are other sectors. I would put passenger EVs as part of the transport segment as something that is changing rapidly. But there are other bits of the transport segment not transforming as easily, and these are areas that require either high heat or they require dense energy molecules, and you can't do that with electricity unfortunately. So they're requiring things like hydrogen or sustainable biofuels, and these are taking a little bit longer to bring to market and to commercialise. So they're still quite a bit more expensive than the fuels we use today. And so the key there is, how do we accelerate the process of commercialisation of these kinds of fuels so that the whole world is changing and transforming to low carbon at pace at the same time by 2050. 00:04:17 Julia Streets: Rob, I'd love to get your thoughts on this. The incentives that are needed in order to encourage consumers to choose lower carbon goods and services that will drive down cost and also increase adoption. 00:04:29 Dr Rob Charnock: Over time we've heard this narrative that low carbon might be more expensive, but as time goes by, you quickly find that the cost profile decreases rapidly, and frankly beyond the forecasts as well. So, I would say, even the economic reason for shifting consumer demand is already coming online in most segments, and this will continue to do so. I also think shifting customer preferences and shifting demands suggest, if you are not properly tackling the carbon profile of your products or even the recyclability of those products afterwards, there is going to be a significant shift away from what you're selling. 00:05:05 Julia Streets: There's clearly a sense, we need to move at pace and we need to move at scale. I'd like to return to COP28, because one of the key topics was about phasing out fossil fuels versus the phasing down of fossil fuels, but the final deal made no mention of either. And instead, we note that the pledge talked about the transitioning away from fossil fuels. So not phasing out, not phasing down, but transitioning away. And Yvonne, I think particularly of a remark made by Ruth Nankabirwa who is Uganda's energy minister. She had a very interesting take on this, and let me just read what she told journalists during COP28: “To tell Uganda to stop fossil fuels, it is really an insult. It is like you are telling Uganda to stay in poverty." I'd love to get your thoughts on that. How would you respond to that? 00:06:00 Dr Yvonne Maingey-Muriuki: I mean, it's a really sort of difficult position to be in. I think on the one hand, African governments, and I'm speaking specifically about the Kenyan government, have made their intentions very clear; we are going to foster low carbon resilient development pathways. If you look at Kenya as an example, where I'm based, where I'm from, 80% of our energy is already renewable. We're looking at more geothermal, hydro, solar. The majority of our grid is actually already quite green. The opportunity within the continent is quite significant to focus on it and to drive renewable energy to power our economy. On the other hand, it's important to think about how Africa is powered specifically, because this is where the root cause of the problem is. About 43% of the total population in Africa lack access to basic electricity. This means that about 600 million people right now do not have access to energy. I think the first question for the African continent is just ensuring that we have access to energy first. But, we have to contend with the reality that African economies for the first time, some of which have just discovered oil, I'm talking about Kenya, looking at one of the most impoverished parts of the country, Turkana, which discovered oil four, five years ago. And expecting some of these local economies to not exploit this resource, I think is a bit rich, particularly from the developed countries. But then we also have to think about in the context of what is the actual contribution to emissions. Look at Tanzania, another great example where they have natural gas deposits, which they have on many occasions shown a desire to develop and to exploit. But when we look at the calculations, Africa already accounts for maybe less than 4% of global greenhouse gas emissions. If Tanzania was to develop all of their natural gas deposits, you are looking at an increase of about 0. 4 to 0. 6% of global emissions. These are economies that do have access to these resources which they have an interest to develop, which they have a right to develop, and which is why we talk about a just transition. 00:08:00 Julia Streets: Rob, how realistic is it to expect developing nations to leapfrog traditional fossil fuels? 00:08:08 Dr Rob Charnock: To me, the critical point in that is how they're going to pay for it. Where is the financing going to come from to look at alternatives? And I think what's really interesting that we've seen from the Asian Development Bank recently is a project in Southeast Asia called the Energy Transition Mechanism. And this recognises that countries have already invested quite heavily in fossil fuel infrastructure, and the expected life of those assets, those coal-fired power stations, is always decades. So what the Asian Development Bank has done through the Energy Transition Mechanism, is provide the financing of the incentives to retire those assets early, and to replace that energy generation with renewable alternatives. Now, the critical piece in this as well is that when you retire a coal-fired power plant, for example, that often supports a community nearby or several communities. So the key piece is to retrain those communities as well to transition them into new jobs, potentially green jobs linked to the renewable energy sector as well. So it's not just about new energy capabilities being invested in, but also retiring fossil fuel, carbon-intensive assets, and replacing those with renewable. 00:09:17 Julia Streets: Mallika, how would you respond to that? 00:09:19 Dr Mallika Ishwaran: I think it's worth dividing the world up in this regard. We have advanced economies who've grown up, if you like, on traditional fossil fuels, and have a lot of infrastructure built around that, and that will take effort to change and to transform. But I think these are economies that have reached an advanced stage of economic development, have the financial resources to be able to do it. We also have another group of countries who are, if you like, on the development trajectory. And I think here there's a real opportunity for them to leapfrog over fossil fuels, and put in place infrastructures and other technologies that are low carbon to start with. So they don't start down the path of fossil fuel development, but leapfrog to something that's better and more sustainable. 00:10:03 Julia Streets: Yvonne, we can't have a discussion about this without referring to the question of carbon markets. So a two part question to you. Number one is, what are they, and secondly, how important are they? 00:10:15 Dr Yvonne Maingey-Muriuki: A carbon market is essentially an opportunity for organisations, companies, countries that have net- zero ambitions and targets to meet them by offsetting their emissions on a global market. So they pay to pollute. Essentially that's what the carbon market is. Is it a significant opportunity? Absolutely, particularly if you are coming from a continent like Africa, which is rich in natural resources, and we have opportunities to remove carbon from the atmosphere and we can actually be paid for those services, it absolutely presents an opportunity for the continent to generate much-needed finance for adaptation. 00:10:53 Julia Streets: I wonder if I could push the conversation on a little bit, because one of the energy solutions of choice is increasingly liquefied natural gas or LNG, which is produced by cooling gas. And such is the case in India where the number of customers using LNG is growing. And let's find out why. Dhirendra Mishra is Shell's LNG terminal manager at its site in Hazira in India. 00:11:20 Dhirendra Mishra: I'm speaking to you from the seawater area. You can hear the seawater pumps running in the background. What we do here is, we receive LNG in large LNG cargo ships, and this cargo is received at minus 160 degrees Celsius. At this temperature, it is transferred from the LNG cargo to the shore-based LNG tanks where it is stored. From these tanks, with the help of multiple booster pumps, we supply this LNG to LNG vaporisers, which use seawater to vaporise the LNG. Now, this regasified LNG is transferred through a 14-kilometre pipeline to a metering station, and it is supplied to various grids. We are connected to all the grids in the country, so we can reach to any customer who is connected to the grid. We are an integral part of the gas infrastructure and supply chain of India that supports various industries, like city gas distribution, steel manufacturing, fertiliser, refinery, chemicals, and other manufacturing sectors. Now, with the government of India's vision of increasing the share of natural gas in the fuel mix, and this coupled with the high growth of Indian economy, we expect the gas market to grow. And with this, we expect to supply more and more LNG fuel to the country in the coming years. 00:12:52 Julia Streets: As Dhirendra was just saying, the demand for LNG in the country is continuing to rise. What role, if any, do you see LNG playing globally in future energy systems? Mallika, can I come to you? 00:13:09 Dr Mallika Ishwaran: Yes, thank you. Great question. I think the key here is to acknowledge the fact that this transition is not going to happen overnight. You're changing an entire energy ecosystem. So it's not just the supply, you're also changing the infrastructure, you're changing patterns of demand, and that's going to take time to happen. And I think in that transition, there is a role for natural gas. We see that in our Shell scenario outlooks, we see it in the outlooks from other groups, like the International Energy Agency. And it's worth noting that within natural gas, LNG or liquefied natural gas provides a much more flexible source of gas, because you're not tied to pipelines going from point X to point Y. LNG is able to respond and be moved around where demand is, so it provides a more flexible way of delivering gas. Now, gas itself can help lower emissions during the transition, particularly in sectors like power generation where it could potentially displace coal. It could also help increase energy security of the new low carbon energy system by complementing renewables and the intermittent nature of their generation. So in both of these instances, gas provides a lower carbon alternative to, for example, coal. Now, it is important in the longer term to drive down emissions from gas itself, for example, through carbon capture and storage, as well as reducing methane emissions from the production transport and use of natural gas. And of course, Shell is very active in this space. 00:14:42 Julia Streets: So let's look ahead to the future. Some critics would caution against relying too heavily on technological innovations as a means to bridge the gap between economic growth and carbon reduction. Rob, love to get your thoughts on that. 00:14:54 Dr Rob Charnock: I suppose my thought is that the critics are quite right. If we put too much emphasis on technological solutions and don't explore all other options available to us, that's a huge risk to take. I think my attitude with tackling climate change is that it's not about one solution, it's much more about solutions on all fronts, and making steady progress on all fronts. Whether we can deploy technology at the scale t…

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    Is There A Role For Oil And Gas In The Journey To Net Zero? Oct 12, 2023
    Show notes

    As the world grapples with the urgent challenge of climate change, the energy industry is working to reduce greenhouse gas emissions while continuing to deliver the secure and affordable energy people need today. Is switching to renewables the answer, and do oil and gas have a role to play? Presented by Julia Streets. Featuring Dr Bassam Fattouh of the Oxford Institute for Energy Studies, Sian Lloyd-Rees of Mainstream Renewable Power and Shell’s Zoe Yujnovich. The Energy Podcast is a Fresh Air Production for Shell, produced by Annie Day and Sarah Moore, and edited by Molly Lynch and Sophie Curtis. TRANSCRIPT Shell The Energy PodcastSeason 4, Episode 4 00:00:00Julia Streets: Today on The Energy Podcast. 00:00:07Bassam Fattouh: If oil and gas is to remain part of the energy mix, the key issue then becomes how to reduce greenhouse gas emissions from hydrocarbon related activities. 00:00:16Sian Lloyd-Rees: If we want to achieve net- zero by 2050, we all need to adopt that 2050 mindset now, making the decisions today that are consistent with the future that we want. 00:00:26Zoe Yujnovich: The journey to net-zero must be achieved whilst at the same time providing a stable and reliable supply of energy. 00:00:34Julia Streets: The science is clear and the world is in a fight to avoid the most serious effects of climate change. Energy and the use of it is one of the biggest contributors to global greenhouse gas emissions. And this means that the oil and gas industry, which supplies much of that energy, is under pressure like never before. Many countries are working to achieve net- zero carbon emissions by 2050, while continuing to meet the demand for secure and affordable energy.The impact of the war on Ukraine on the global energy market has shown just how delicate the balance is to maintain. Some critics argue that only a drastic scale back from oil and gas will do, advocating for actions like an immediate end to the development of new oil and gas fields. Others believe that the global economy cannot be decarbonized without the constructive participation of the oil and gas industry.On one thing, there is broad agreement that business as usual is no longer an option. How can the world manage the balancing act of meeting demand while investing in the energy of the future? Does it need to go further and faster? Hello, I'm Julia Streets, and today on the Energy Podcast we ask; is there a role for oil and gas in the journey to net- zero? With me to discuss this are Dr. Bassam Fattouh, Director of the Oxford Institute for Energy Studies, Sian Lloyd- Rees, the UK Managing Director for Mainstream Renewable Power and Shell's Integrated Gas and Upstream Director, Zoe Yujnovich. So, Bassam, let me start with you. How does the world get its energy today? 00:02:10Bassam Fattouh: Based on the latest statistics for 2022, hydrocarbons, that means oil, gas and coal, accounted for the bulk of primary energy consumption. Oil accounted for more than 30% of primary energy consumption, followed by coal, which still account for more than 25%, and then the share of natural gas is not far away, standing at around 25%. The share of renewables in the form of solar and wind has been rising fast and accounted close to 10% of primary energy consumption, surpassing nuclear energy and hydroelectricity. But Julia, it's important to focus not only on the shares, but also the growth rates. For instance, if you take coal, the growth rate between 2012 and 2022 was close to zero, whereas renewables grew more than 12% per annum during the same period. So the energy mix actually can evolve faster than implied by historical standards, which is needed if we are to meet our climate targets. 00:03:12Julia Streets: So in support of the UN Paris Agreement's ambition to limit the global temperature increase to 1. 5 degrees centigrade, above pre- industrial levels, many countries have set net- zero targets and I'm curious to know what does that mean for the energy industry? Sian, can I come to you? 00:03:28Sian Lloyd-Rees: As Bassam’s just talked about, the energy mix today includes a number of different energy sources and to achieve net- zero, we need to grow our cleaner energy mix going forward, but that's going to take time and it's going to take a balance of different things. From my perspective, as a wind developer, we are focused on trying to accelerate the uptake and the introduction of wind powered energy and solar energy on a global basis. But there are challenges.When we look at the wind resource in the world, a lot of it lies in the northern- hemisphere, the greatest need is in the southern- hemisphere. It lies far from offshore in quite deep waters, and that requires different technologies, floating technologies, to be able to access it. We then have the challenge of transporting that wind energy, once we've managed to deliver it at an affordable price, to different parts of the world. So we have technology challenges, we have geographical challenges. We also have the challenges around the supply chain and the materials that we need in order to be able to ramp up in terms of renewables. Yes, we need to grow our renewable energy percentage in terms of the mix, but we also need to focus on the energy sources today and we need to decarbonize those. Oil and gas today needs greater decarbonization, but so do many other heavy industries as well around the globe. 00:04:39Julia Streets: And Zoe, perhaps I could bring you in here. I'd love to get your thoughts as well about what all this means for the energy industry. 00:04:44Zoe Yujnovich: The journey to net- zero must be achieved whilst at the same time providing a stable and reliable supply of energy. Whilst the global energy mix is changing, demand for energy services will continue to grow and it'll need to be met by a combination of different types of energy. It's certainly going to be critical that we don't dismantle the current energy system faster than we can build the clean energy system of the future. We are very focused on trying to understand how to change the demand patterns and indeed how we therefore supply alternative energy into those different demand hubs. Oil and gas will continue to play a crucial role in the energy system for decades to come, but of course we will see that demand reducing gradually over time. The other thing I think I would say is of course it's also very critical that we actually lead by example in how we drive that energy efficiency. And we are very focused on cutting emissions from the existing operations. So in short, it's absolutely essential that the energy mix will change, we must reduce emissions from our own operations and also find those profitable sustainable ways to transition to net- zero. 00:05:56Julia Streets: Just building on that, there's some warnings from environmental groups. The continued investment in oil and gas infrastructure can risk the making of the transition to cleaner energies even more difficult or even too expensive. And I'm really curious to hear from our guests today whether they think that is fair. Sian, can I come to you first? 00:06:16Sian Lloyd-Rees: Yes, and there is a lot of discussion around the concern that infrastructure decisions and investment today shape the energy future that we'll get. So from our global wind developer perspective, we look carefully at government policies and the subsidies and investment areas they prioritize. And the UK move faster than many countries in focusing its fiscal incentives into renewable development with a contract for different commercial mechanism, which they initiated, which guarantees a long- term contract certainty for wind developers. Likewise, in the USA, we're seeing the Inflation Reduction Act focused on attracting investors and infrastructure developers into the renewable energy space, and the EU has got a similar mechanism.So we certainly are seeing a subsidy reallocation trend in favor of renewable energy sources and the growth which all helps to address the argument around renewables being more expensive or not fit for purpose. But overall, if we want to achieve net- zero by 2050, we all need to adopt that 2050 mindset now, making the decisions today that are consistent with the future that we want. And this is what we look for when we engage with governments in different parts of the world in terms of where their future investment is going. 00:07:23Julia Streets: Bassam, can I bring you in here, because I'm curious what would be the impact of stopping new investments in oil and gas altogether? 00:07:30Bassam Fattouh: Well, at this stage of the transition where we haven't seen a fundamental shift in demand and in fact demand for oil and gas continues to rise, the impact of stopping investment will be higher and more volatile prices for the simple fact that by not investing, not only there will be no new oil and gas supplies, but also existing supplies will start declining. And high oil and gas prices have multiple effects. It raises the issue of affordability and governments will have to put in place packages to protect consumers, which will affect their fiscal balances. Also, energy transition policies may lose support from the general public if this results in high energy costs. That is why it's key to have an orderly and just transition. But there are also other unintended consequences. For instance, higher gas prices can result in substitution from gas into oil and coal which have higher emissions.In fact, the Russia- Ukraine war revealed these types of substitutions. In Europe as a result of high gas prices, we saw a substitution from gas into diesel, fuel, oil and coal in power. In some developing countries, which were priced out of the gas market, particularly the LNG market, we saw increased reliance on coal. Some developing countries' access to finance is extremely limited and they face high cost of borrowing and don't have in place the appropriate regulatory framework to attract investment in renewables. Also has been chronic underinvestment in distribution and transmission networks, which actually could limit the rapid deployment of renewables. 00:09:09Julia Streets: There's one other element to the finance investment discussion, which we must bring forward, because the profits of oil and gas companies regularly hit the headlines. And following from the energy crisis brought about by the invasion of Ukraine, energy costs for households have soared across the world. Meanwhile, companies like Shell have reported record gains. So I suppose my question is shouldn't oil and gas companies use more of their profits to fund the transition? And of course Zoe, I have to come to you with that question. 00:09:38Zoe Yujnovich: As we mentioned earlier, today's energy system is still overwhelmingly comprised of fossil energy and whilst recognizing the need to continue to decarbonize that energy, many of the oil and gas reserves have a natural decline. So we have to continue to invest to essentially ensure that we can have that stable production over time.Over the last 15 years, as well as maintaining our core business of oil and gas, we have been investing in a wide range of low carbon energies, from hydrogen production to de- risking carbon capture and storage, biofuel production, electric vehicle charging, as well as wind and solar generation. We have invested in 2022, about 8. 2 billion in low carbon energy and non- energy products. This is about a third of our total capital expenditures, and of that about 4. 3 billion went into low carbon energy solutions. 00:10:38Julia Streets: Bassam, I'm keen to get your voice on this discussion about the use of profits as well. Your thoughts? 00:10:43Bassam Fattouh: Well, in this current environment, international energy companies are generating very healthy cash flows. Part of these cash flows will be directed towards investment in oil and gas project, because the demand for oil and gas is still rising. But there are also expectations that companies must allocate much larger part of their cash flows and capex budget to clean technologies. And I think the amount of capital allocated to renewables has become a key metric for many investors and NGOs. The challenge really is how to allocate cash flows to these projects at an accelerated rate, while achieve attractive returns to their shareholders as some of these technologies, such as green hydrogen and CCS is yet to scale up. If the alternative opportunities in the clean technology space are limited and evaluations are inflated and large investments in hydrocarbons are not particularly rewarded by investors, because of fears that investment in new project increase the risk of stranded assets, then companies will use these high cash flows to reduce debt, return money to shareholders through buybacks and dividends.Actually a trend that we have seen in this cycle, this has the attraction of making the energy firms more resilient in terms of lowering their leverage ratios and making these companies more attractive for investors and shareholders. But of course for many investors and perhaps observers, this is a signal that companies are not doing enough to decarbonize their activities and they are not transforming their activities and operations fast enough. But from company's perspective, this is seen as ensuring that capital is not destroyed in projects that don't meet their profitability criteria and where scale has not yet been achieved. 00:12:28Julia Streets: So, how is the oil and gas industry driving down emissions from its existing operations? 00:12:34Bassam Fattouh: If oil and gas is to remain part of the energy mix, the key issue then becomes how to reduce greenhouse gas emissions from hydrocarbon related activities. And this requires heavy investment in areas such as electrification of platforms, reducing venting and gas flaring, CCS and the development of low carbon fuels in the aviation and transport sector. This also requires developing and harmonizing standards for measuring, monitoring, reporting and verifying emissions. And although there has been progress made in this area, I think the landscape remains very fragmented, which make it difficult to measure performance over time and compare between companies and countries. So that's why the efforts really should be concentrated on how to reduce the emissions of hydrocarbon related activities while demand is still there. 00:13:24Julia Streets: Zoe, keen to hear your thoughts. 00:13:26Zoe Yujnovich: There are many things that we're doing recognizing that it's critical that we take action now on those things that we control, while also of course influencing the way demand will evolve for our customers. When we look at carbon emissions, we've been able to reduce ours from our own operations by 30% at the end of 2022, compared with 2016, which is our reference year, and this takes us more than halfway toward our target, a 50% reduction by 2030. For several years we've also been transforming our remaining integrated refineries into low carbon energy and chemical parks. But we also recognize that when we make new investments, we must hold a really high bar to ensure that they're not just economically resilient, but they're carbon resilient as well. So for example, we just recently brought online Timi in Malaysia, our first wellhead platform in the country that's powered by a solar and wind hybrid power system.We're also growing our liquified natural gas business that will play a critical role in a balanced energy transition in the way it also compliments renewables production. Liquified natural gas can be easily transported to places where it's needed most and that picks up on Sian's point that not all countries will be endowed wit…

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    Are Roads Ready For Electric Vehicles? Jul 14, 2023
    Show notes

    The electric vehicle (EV) market is booming and widespread adoption of EVs is critical if countries are to realise their climate ambitions. But every new EV on the road increases the demand for convenient, affordable charging. The Energy Podcast investigates how the world is meeting this infrastructure challenge. Presented by Julia Streets. Featuring Elizabeth Connelly of the International Energy Agency, Lucie Mattera from ChargeUP Europe, Ingrid Malmgren of Plug In America and Shell’s Istvan Kapitany. The Energy Podcast is a Fresh Air Production for Shell, produced by Annie Day and Sarah Moore, and edited by Molly Lynch and Sophie Curtis. TRANSCRIPT Shell The Energy PodcastSeason 4, Episode 3 00:00Julia Streets: Today on The Energy Podcast….. MUSIC BED COMES IN Istvan Kapitany: When this is becoming really the global way of mobility, finally, we really need to be sorting out public charging.Ingrid Malmgren: Through deliberate planning and innovation and organic growth, we're going to have chargers where we need them, when we need them, and we'll have a cleaner, more sustainable equitable transportation system. 00:29Julia Streets: There can be little denial that the electric vehicle revolution is upon us. According to the International Energy Agency, sales of Electric Vehicles, or EVs, exceeded 10 million worldwide in 2022, and the global market is predicted to grow even further this year. This is good news for the nations relying on widespread adoption of EVs in helping them to realize their climate ambitions. If global carbon emissions are to reach net zero by 2050 in line with the Paris Agreement, there will need to be 300 million EVs on the road by the end of this decade.Such rapid growth intensifies the need for EV infrastructure, namely access to reliable, affordable charging. Ensuring that EVs match the cost and convenience of running a conventional fuel vehicle is crucial, not just for existing owners, but also in convincing more drivers to make the switch. Governments and businesses across the world are grappling with the infrastructure challenge created by the EV boom with varying degrees of success.Hello, I'm Julia Streets, and today on The Energy Podcast we ask, are roads ready for EVs? MUSIC ENDS With me to discuss this are Elizabeth Connelly, transport analyst at the International Energy Agency. Lucie Mattera, Secretary General of the infrastructure industry association, ChargeUp Europe. Ingrid Malmgren, policy director at Plug In America, and Shell's Executive Vice President for Mobility, Istvan Kapitany.I'm delighted that you're all with me today. Elizabeth, when you think about EV infrastructure, what's the global outlook? 02:16Elizabeth Connelly: One thing to note about charging infrastructure right now is that most charging of electric cars occurs at homes, but a lot of the attention is around public charging, of course, because this helps enable people to own EVs that don't have access to home charging. Looking at the picture today, worldwide there are about we estimate 17 million home chargers for electric vehicles and that's compared to about three million public EV chargers.In terms of who's leading the way with charging infrastructure, I don't want to say any one country is doing better or worse, because I think it really depends a lot on the setup of homes and whether people are living in detached homes or in multi- unit dwellings. So for example, in the US I think around 80% of EV owners live in single family homes and so it's really easy to charge at home and there's less pressure for there to be public charging infrastructure, at least in these early stages. While on the other hand, in China only about 50% of charging occurs at home.So I think there are factors that make it very different across different regions around what is the right level of public charging infrastructure. For example, China accounted for 50% of electric light duty vehicles last year but 65% of the public charging infrastructure. So I think in that way China's leading, but I think there's also factors that make it you need to be leading in terms of public charging. 03:45Julia Streets: I've heard some people talk about having quite deep- seated concerns about what they might call range anxiety, in terms of will you be able to get the mileage, the kilometrage that you are looking for. 03:57Elizabeth Connelly: Sure. So at least in terms of cars, and I think trucks as well, range anxiety is a real concern. We see automakers in the car industry, and I think also in the truck industry, really looking at how they can increase EV range, especially in ways that maybe don't require larger and larger, heavier and heavier batteries. So thinking about these in-route charging, whether it be highway fast chargers like we've already seen across highways around the world or thinking about for trucks in particular rest stops, how long the rest time is and building in infrastructure that can facilitate charging in whatever amount of time. I think the US and the EU have different regulations on how long driver breaks should be for these long haul trucking segments. So really thinking about how the operations need to work in order to design the adequate infrastructure in a way that could help reduce as much as possible the power demand on the grid. 04:55Julia Streets: Lucie, from your point of view, at ChargeUp Europe, what are your thoughts? 04:59Lucie Mattera: So on range anxiety, what we are finding that this is a factor that is less prevalent today in terms of sort of slowing down the switch to EV charging. There was a recent consumer survey that was commissioned by the European Commission and what they found was the primary obstacle for the switch to EV was actually the price of the car rather than the range anxiety or the lack of infrastructure. So in terms of what came up first as an obstacle for a driver that's considering the switch to e-mobility, that was firmly on the top of the list. 05:32Julia Streets: Ingrid, what do you think? 05:34Ingrid Malmgren: I think that with regard to passenger vehicles, since so many people charge at home in the United States, for most people's day- to- day driving, range anxiety is not a huge issue. Most people drive around 30 miles a day and new EVs have ranges well over 250 miles a day. So many people only need to charge up every several days or once a week. 06:00Julia Streets: Istvan, can I bring you in here? How important in the big debate about whether a motorist will make the switch to EV is the question of infrastructure? 06:10Istvan Kapitany: It's very, very important and we are already charging in 30 countries in the world. So we are pretty much one of the biggest operator in terms of the reach. The United States is very different than China. So in China we have already well over 20,000 public chargers. Most of the people, of course, are not having the ability to charge at home, so we really need to be catering for that immediately.In the United States, in different parts of the United States, you have the picture very different. And in Europe, we just did a survey now, whilst a year ago it was basically 33% of the people who didn't have charger at home, this is now 44% of the people who are driving EV cars do not have charger at home.Why is it happening? Of course, after the early adapters it is becoming more and more mainstream activity, which is great. We see that people are buying this for commuting and therefore public charging is becoming a very important part of this equation. At the early stage, many people thought, oh, it's going to be all home charging. It is just not possible. We are in 84 markets and 90% of the people who fill up at Shell wouldn't be today with electricity or with fuel but wouldn't have an ability to charge at home. So when this is becoming really the global way of mobility, finally, we really need to be sorting out public charging. 07:30Julia Streets: There's a huge element here about the growing availability of charging needed in convenient locations, whether they're from forecourts and streets to workplaces, retail car parks. I just want to pick up on this because we're going to take a quick trip to Germany where Carlo Cumpelik, Shell's network delivery manager for Germany, Austria, and Switzerland, has been at an EV charging site in Berlin. 7:53Carlo Cumpelik: I stand here in Berlin at Konrad -Wolf -Street at the parking lot next to the REWE Supermarket. REWE is one of Germany's leading food retail companies. This location is the very first REWE Supermarket where we installed our recharge charge posts.In the beginning of this year, Germany crossed the magic number of over one million fully electric cars registered in the country. The German government expects 15 million electric cars on the streets by 2030. With this number of electric vehicles growing, our aim is to enable as many people to drive as many electric kilometres as possible, whether that is at home, at work, or on the go.REWE opened their shops at our service stations in the Czech Republic and in Austria. In Germany, REWE asked us to deliver a fast charging experience for their customers at REWE Supermarkets and Penny Discounters. Currently, we already operate our charging solutions at 10 supermarkets and we plan to install Shell recharge charging posts at a minimum of 400 REWE Supermarkets and Penny Discounters across the whole of Germany. 09:15Julia Streets: Carlo Cumpelik.I suppose one of the things that we're thinking about is we talk about private charging and we talk about public charging, I'm wondering about almost what you might call municipal charging. I'd be really curious will we see some infrastructure innovation in terms of roads and road infrastructures, almost like the railways providing some charging capability.Elizabeth, I'd love your thoughts on that. 09:40Elizabeth Connelly: Sure. So I think a lot of the conversation around charging infrastructure has tended to be about light duty vehicle charging, but obviously electrifying trucks is I think much more complicated and will require some new innovative solutions. So in addition to the traditional box cable charging points that we've been talking about, I think particularly for these heavy duty vehicle segments for long haul trucking or even just medium- sized delivery trucks, there could be a place in the future for electric road systems.So that could be either wireless inductive charging built into the road or it could be something that is a throwback where we have overhead cables that you've seen in trolley buses of the past. These things can help reduce demand on the grid from cable charging and spread out the power demand over the journey of the vehicle extending its range without needing these megawatt- scale fast chargers. 10:37Julia Streets: So I wonder if we could change the conversation and look at it from a slightly different point of view, which is the obstacles, the hurdles to infrastructure, because this ultimately really matters when it comes to adoption. Ingrid, where do we see the biggest hurdles? 10:51Ingrid Malmgren: The big issue in the United States is for charging for people who don't have access to home charging. People who live in multi- unit dwellings or multi- family dwellings. It's not just an accessibility issue, because it's far less convenient, but it's also an affordability issue.For people who can't charge at home, they need to use public chargers, which typically cost between three and four times as much per kilowatt hour as your home charging rates. It's definitely a cost issue. So there's definitely an equity issue there, and that I think is the biggest hurdle that we're facing right now, particularly in cities.Obviously, the distance between chargers is an issue and having access to public charging in places where there's far less demand for it. That tends to be the issue in rural areas. And then there's always an income issue. So if you rent in the country and you don't own your home, you're less likely to be able to install a charger. You'd have to get permission from your landlord. You wouldn't be able to recoup that money. So the income issue definitely can be exacerbated.I think EVs could go either way. They could make transportation more equitable or, if they're not implemented well with charging, it could make it less equitable. 12:11Julia Streets: Lucie, I'd love to hear your thoughts about where some of the hurdles may exist. 12:16Lucie Mattera: In Europe, you will find some similar difficulties as Ingrid mentioned. It's about how do you make it a little bit more democratic for people who do not live in detached house but in multi-family buildings. You have examples of good practice across Europe to basically make that easier.In France, you have a right to plug. Basically a tenant in a building can request to have a charging station installed in the building. You can also prescribe some electrification requirements for buildings that are being renovated so that it doesn't cost a fortune when you come in as a new tenant to get your EV charged at home.On the point that you were making, Ingrid, indeed, the infrastructure will go where the demand is, and so you will have some of that imbalance between areas where you have a lot of EVs and areas where you have fewer EVs. The way Europe is trying to address that is by setting targets by law. So those targets are both capacity based and distance based. So they are dynamic, which means they will increase over time as the uptake of EVs increase, and again, as the number of EVs on the road increases, you'll see more charging infrastructure.Adding to that a distance based target, which means you need to have enough infrastructure at a reasonable distance. They've set that both for HEVs and for EVs and that's coming into force next year and hopefully will address some of the difficulties or inequality in the spread of EV charging infrastructure we're seeing today across Europe. 13:47Julia Streets: Istvan, I'd love to get your thoughts are on what are the main issues for businesses like Shell? 13:52Istvan Kapitany: I see three main issues with EV for the society to deal with. One is it has to be available. Really need to be giving and offering all the support for the different kind of commercial ventures to build out. We order now more EV chargers at Shell Mobility than petrol pumps. That always surprises people. So we are obviously great believers of letting the business to make sure that it is becoming something which is a commercial venture that you can make money out of it.Because if you build a system up on regulation too much, it's not going to be effective and not efficient. Therefore, it has to be commercially oriented. It has to be reliable, because that's our main job to make it a reliable experience for customers.I was recently in a conference and I asked put up your hand if you had a problem with filling up with petrol. Nobody put it up. Put up your hand if you have a problem with using a public charger. Almost everybody put up their hand.Finally, it has to be investable. So it has to be a business case which is making it profitable. Because if you're not able to make this business profitable at a normal price which people can afford, it's going to be very difficult to maintain. 15:05Julia Streets: I'd love to bring in Elizabeth at this point. From a public sector versus private sector point of view, what more can policymakers and businesses do to help? 15:14Elizabeth Connelly: Sure. Well, I think, I'm not going to say regulations are bad in this case. There can be carrots and sticks, but I…

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    How Can Carbon Markets Limit Climate Change? May 17, 2023
    Show notes

    Carbon markets are advancing on a global level, following the first country-to-country trades at COP27. The Energy Podcast investigates how carbon pricing works and examines what role it can play in the race to reduce greenhouse gas emissions. Presented by Julia Streets. Featuring Dr Hasan Muslemani from the Oxford Institute of Energy Studies, Andrea Bonzanni from the International Emissions Trading Association and Shell’s senior carbon pricing policy advisor, Dr Malek Al-Chalabi. With additional contribution by Stephen Kansuk, Head of Environment and Climate Change at the United Nations in Ghana. The Energy Podcast is a Fresh Air Production for Shell, produced by Annie Day and Sarah Moore, and edited by Molly Lynch and Sophie Curtis. EPISODE TRANSCRIPT: 00:00Julia Streets: Today on The Energy Podcast... MUSIC BED COMES IN Andrea Bonzanni: Emissions must be reduced globally irrespective of where they take place. The atmosphere is one at the end of the day. Article VI allows reducing emissions where it’s more efficient. Dr Hasan Muslemani: We have solutions that are being praised as the holy grail of net- zero… The issue is that we need all the solutions that we can get because in the fight against climate change, we are really in a race against time. Julia Streets: The cost of climate change. It's a phrase commonly used by governments, companies, and campaigners across the world when discussing the need to limit global warming to well below two degrees Celsius. Quantifying the exact cost of far- reaching effects of climate change is not an easy task. But putting a price on emissions is viewed by many as an effective means to help drive down levels of CO2 in the atmosphere. The idea is simple. Putting a price on carbon emissions creates a financial incentive to reduce them.Carbon markets have existed for decades. There are many carbon pricing systems around the world, but at present, it is estimated that only a quarter of emissions are priced. That could soon change. At last year's COP27 climate conference in Egypt, the first country- to- country carbon trades took place. Could this pave the way for further uptake of carbon trading and what impact could that have in the fight against global warming? Hello, I'm Julia Streets, and today on The Energy Podcast: How can carbon markets limit climate change? MUSIC ENDS With me to discuss this are Andrea Bonzanni, who's the international policy director at the International Emissions Trading Association, who you may well remember from a previous episode of The Energy Podcast. He is joined by Dr. Hasan Muslemani, who is the head of Carbon Management Research at the Oxford Institute for Energy Studies. And our third guest is Dr. Malek Al- Chalabi, who is a senior carbon pricing policy advisor at Shell. Hasan, perhaps I could start with you. For the benefit of the audience, would you just mind explaining what we mean when we talk about carbon markets? 02:18Dr. Hasan Muslemani: The fundamental concept behind a carbon market is really to put a price on carbon, or in other words, to quantify the cost of damages that emissions will cost our society over time. To do this, we have, at the heart of carbon markets, what is called carbon accounting or greenhouse gas accounting. This represents a set of standards and methods that help us quantify but also verify the impact that each business creates on the environment, and this impact is reported in terms of tons of CO2 emitted.Now, something that I really want to emphasize here is that today, we speak of carbon markets, but we need to differentiate between two different types of markets. The first is what we call a compliance market, which is a market that is heavily regulated and corresponds to a specific region or jurisdiction, and where companies within that jurisdiction have to take part in the market. The other one is a voluntary one. This is a lot less regulated and where participation is voluntary, as the name implies. The voluntary carbon market is based on the concept of offsetting. That is where a company wishes to mitigate or neutralize its own emissions. So, it goes out and invests in projects which are reducing equivalent amounts of emissions elsewhere in the world. 03:30Julia Streets: Can you talk to us a little bit about how they work in practice in everyday terms? 03:36Dr. Hasan Muslemani: Starting on the compliance markets, and the objective is really to put a price on carbon, there's two different ways to do this. The first one is carbon taxation, which should be a simple concept. We have countries like Norway and Denmark, which would impose a specific tax on every ton of CO2 that a company would produce within those countries. The key here, really, is for that carbon tax to be high enough to incentivize businesses to change behavior or to move to greener production. This is essentially a stick form of regulation where businesses have to lower their emissions or face an additional cost.The other mechanism, which is a cap and trade mechanism, which is the more familiar one, and in this system we have an authority, say, the European Commission, which sets a cap on how much emissions can be generated as a whole within the continent, within Europe, and then allocates a number of allowances or carbon credits to European countries and companies for them to trade amongst each other. Here, each carbon credit or allowance is representative of one ton of CO2.This allocation process, what I want to note, is done using the historical emissions of each one of these companies. This is a process that we call grandfathering. The overall cap is reduced each year in order to meet a certain European climate target in the future. The way this works is where companies that have lowered their emissions below their targets, now they have surplus of allowances, which they can go into the market and sell to companies that did not do so well and will require to buy credits. So, this mechanism really is sort of a carrot but also a stick sort of regulation. 05:12Julia Streets: Thank you for explaining how they work. I suppose my next question, is how effective are they proving to be? 05:19Dr. Hasan Muslemani: The longest running and actually the biggest ETS in the world, that is the EU ETS or emission trading scheme. This has started in 2008 and has gone through different phases over the years. But I do want to mention that it has suffered from a number of setbacks over those years. To give an overview, the carbon price at the beginning was around 30 euros per ton, but that price has crashed to less than 5 euros around the financial crisis of '09. This was most likely because of two main reasons. The first one is that companies had to report their emissions in such a regulated manner that they have not done before, and so they might have overestimated how much emissions they emit and hence how much allowances they eventually received from the system. But also, because of the financial crisis itself, it meant that business offices aren't lit, emissions aren't as high as usual, so they did not need to surrender as much allowances at the end of the compliance phase, which eventually meant there's an oversupply of credits in the market, and so the price has crashed.The good news is the EU ETS has gone through sort of a recovery mode over the past 10 years, and today the price has not only recovered but reached the level which is believed to incentivize most sectors to lower emissions, and that level is around 100 euros per ton. 06:41Julia Streets: It's been so helpful to get a sense of progress, thinking about the dynamics of the market since launch, and also to think about the market share.Andrea, let me bring you in here because this is about the world's attempts to limit global warming to well below two degrees Celsius, in line with the Paris Agreement. Are we likely to see the growth of carbon markets in pursuit of this great ambition? 07:03Andrea Bonzanni: Well, we know that meeting the goals of the Paris Agreement requires a radical transformation of many areas of our economies and our lives, and for the reason outlined by Hasan, carbon markets and carbon pricing in general are one of the tools that governments are increasingly considering. Carbon markets are spreading from a core of rich runs economies such as the EU, California, South Korea, and New Zealand, to middle- income and emerging countries. This year, we had Mexico and Indonesia launching their emission trading systems, and the two schemes are expected to expand and evolve over time. There are other countries in Southeast Asia and Latin America that are implementing carbon markets, and even some African countries are starting to consider them. 07:45Julia Streets: Andrea, when we last spoke, you would just at COP27. As I mentioned in the introduction, that's when the first country- to- country carbon trade took place. Could you tell us a bit more about that and what happened at COP27? 07:58Andrea Bonzanni: Sure. At COP27, Ghana authorized the transfer to Switzerland of certified emission reductions. This transaction was the first of its kind under Article VI of the Paris Agreement. There were emission reductions generated in Ghana thanks to the implementation of enhanced rice production techniques that avoided CO2 and methane emissions. These emissions will be counted towards the climate target of Switzerland. In turn, Ghana commits to apply a corresponding adjustment to its emission account.Mechanisms like this have vast potential to generate investment flows in climate change mitigation and sustainable development from the Global North to the Global South. Article VI is still a small, nascent market, but we expect it to grow and countries are looking to buy and sell emissions to each other.In addition to Ghana and Switzerland, after COP27, another transfer was authorized, this time from Thailand to Switzerland. A country like Japan has 26 bilateral agreements with countries around the world and is looking to import emission reductions in the near future. Countries like Singapore, South Korea, New Zealand and Canada are all looking to purchase carbon reduction from abroad. Many countries around the world, mostly developing countries, are preparing and getting ready to become sellers in this market. 09:20Julia Streets: Andrea, just picking up on one of the comments you made there. One project being implemented under the Ghana- Switzerland, Article VI carbon pricing deal is a UN initiative that aims to reduce greenhouse gas emissions from rice cultivation by training local farmers in sustainable agriculture practices. Rice cultivation currently accounts for over 10% of global methane emissions, and this is because the main method of rice farming involves flooding the fields, which prevents oxygen from penetrating the soil, causing a buildup of bacteria. This bacteria emits methane into the atmosphere, contributing to global warming.The United Nations Development Program aims to promote climate- smart rice cultivation for Ghanian farmers, leading to a significant reduction in methane emissions. Stephen Kansuk, Head of Environment and Climate Change at the United Nations in Ghana, speaking from the capital Accra, told us more…. 10:18Stephen Kansuk: In Ghana, rice is cultivated as both food and cash crop. Research shows that in 2020, Ghana's total rice consumption was about 1. 4 million metric tons. To support rice farmers to reduce methane emissions in Ghana, the United Nations Development Program, the Ministry of Environment Science Technology Innovation, the Ministry of Food and Agriculture, and the Environmental Protection Agency, all in Ghana, and the future office for the environment in Switzerland are implementing a climate- smart rice project.The project is supporting over 7, 000 rice farmers across Ghana to adopt an alternate wet and drying technology in rice cultivation to reduce methane emissions. This project is one of the initiatives under a partnership between the government of Switzerland and Ghana. The agreement is to allow public and private institutions to collaborate to invest in climate change mitigation interventions in Ghana and exchange carbon credits with Switzerland for payments.In terms of benefits with this climate smart rice project, our target is to achieve about 1. 1 million tons of carbon dioxide equivalents, emission reduction targeted by 2030. The project will also provide extra incomes for the farmers as a carbon revenue through a performance bids payment system, and this will help increase their resilience. The project is also helping to create a number of jobs at the rural level so that they will be able to adapt effectively to the impact of climate change. 12:14Julia Streets: Andrea, I wonder if I could bring you in because there has been some reaction that has accused governments of rich countries of outsourcing their emissions reductions to governments of developing countries. Is that fair? 12:27Andrea Bonzanni: Emissions must be reduced globally irrespective of where they take place. The atmosphere is one at the end of the day. Article VI allows reducing emissions where it's more efficient, deploying capital where it can abate or remove more emissions. Researchers have quantified the cost savings of meeting climate targets used in Article VI will be up to 250 billion US dollars a year by 2030.There is a perception out there that projects reducing emissions abroad replace strong climate action at home. But I don't think there is evidence supporting this thesis. In the longer run, achieving net- zero means that every ton of CO2 emitted must be compensated by a ton of CO2 removed from the atmosphere. It is not rational to believe that all countries, especially European ones, can get to net- zero without using international carbon market mechanisms. International carbon markets deploy investments in things like natural climate solutions or emission removal technologies, such as direct air captures, bioenergy with CCS, and then deploy the capital where these projects are feasible. Not all geographies, not all jurisdictions have the potential to scale these solutions and achieve net- zero within their borders.Rich countries need strong climate action both at home and abroad, and we need carbon markets. We need well- designed one. 80% of countries in their nationally determined contributions said that they're planning to use carbon markets to meet their goals. So, we should start implementing carbon markets soon and let investment flows from rich countries into developing countries. 14:02Julia Streets: So we've explored this from the point of view of what are carbon markets. We've thought about this from an international global sort of point of view, and whether or not this is fair from a jurisdiction point of view. We've also heard about a real case study and its application of where some of this collaboration comes in.Malek, could I ask you, from a corporate point of view, why does this particularly matter to a company like Shell? 14:25Dr. Malek Al-Chalabi: Yeah, thanks. Thanks, Julia. At Shell, we've set a target to become a net- zero emissions energy business by 2050, and our policy positions on climate and energy transition serve as a global framework for Shell's advocacy with governments, international organizations, and associations. This includes supporting government policies that will help the world to achieve net- zero emissions by 2050. A variety of policy tools are required, one of which is carbon pricing, and at Shell, we advocate to put a direct price on carbon emissions as part of a broader policy framework to achieve net- zero emissions. The carbon price, whether through tax, cap and trade, or hybrid system, should apply to as many sectors of the economy as possible and increase over time. Additionally, Shell ad…

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